EXCLUSIVEBRANDSOURCING RETAILER/WHOLESALER ...

and products, under at least nine of its private brands: ‘good & deLISH,’ nice!, Well at
Walgreens, Walgreens, W, Finest, Studio 35 Beauty, Pet Shoppe, plus a new brand, ology. The
biggest news in this current fiscal period came in June 2012, when Walgreens announced its latest,
and biggest-ever takeover, a $6.7 billion (£4.3 billion) cash-and-stock bid for 45% interest in the
UK-based, privately owned Alliance Boots (also in this database). Boots operates some 3,300
stores in 11 countries. The deal, completed in September 2012, pushes Walgreens into becoming a
$100 billion+ retail, market leader. It also promises to be by far the most significant game changer
for Walgreens, dramatically restructuring it from being primarily a US drugstore chain into a
global pharmaceutical wholesaler. Also, the takeover plays a significant role in building
Walgreen’s private brand/exclusive brand strategy, bringing in the Boots own brands. Walgreens
has an option to purchase the remaining 55% interest in Alliance Boots by August 2015.
(Walgreens projects its fiscal 2016 revenues will increase by more than 80% to $130 billion-versus
fiscal 2012.) Additionally, it will re-create Walgreens as a manufacturer, merchandiser,
distributor, and licensor of its own powerful brands. The acquisition catapults Walgreen onto the
world stage, as the biggest pharmaceutical wholesaler as well as being the largest purchaser of
prescription drugs and many other health and well-being products. It also returns Walgreens back
into manufacturing. Walgreens stores very likely will start selling Boots’ own brand products
including its No7 cosmetic and skin care lines, the Botanics skin/hair/bath/body products, the
Soltan suncare products, the Champneys Collection of spa-quality body and skincare products,
and its Almus generic brand drug line. Walgreens, through it websites, drugstore.com and
Beauty.com, purchased early in 2011, already sells Boots No7 products. Boots beauty brands,
including No7, through licensing contracts, also are sold in over 1,750 Target stores, 330 of which
have a Boots beauty advisor, and online on target.com, as well as the website ShopBootsUSA.com
website. In addition, No7 is now sold in some 450 Ulta beauty stores across the US and on
ulta.com. Shoppers Drug Mart in Canada also carries the Boots brand range. The Boots
Laboratories beauty range, in collaboration with Procter & Gamble, is now being sold to
independent pharmacies in five European countries. Alliance Boots has been diligently
internationalizing its key brands and the US market promises to expand rapidly with Walgreens as
its partner. For an encore, Walgreens announced in July 2012 its plans to buy 144 stores in seven
states, which generated 2011 sales of $825 million, from Stephen LaFrance Holdings, Inc. The
$438 million deal, which should close early in September, includes: USA Drug, Super D Drug,
May’s Drug, Med-X, and Drug Warehouse stores in Arkansas, Kansas, Mississippi, Missouri,
New Jersey, Oklahoma and Tennessee. The deal also includes a distribution center in Pine Bluff,
Ark., and a wholesale and private brand business, Walgreens looks to expand its pharmacy
business into those markets, reaching into smaller communities. Short-term plans call for
continuing that business under its current banner brands. Walgreens is expected eventually to
convert them over to its Walgreens logo.
Procurement Contacts: Joseph Magnacca, President of Everyday Living Products and Solutions;
Bryan Pugh, VP Merchandising; Maurice (Moe) Alkemade, Division VP, General Merchandise
Manager/Private Brands; David Van Howe, VP Purchasing; Kristen Abreu, Director of Private
Brands; Brad Barbera, Director Private Brand Product Dev.; Laura Sturdevant and Jon Rudden,
both directors Private Brands
WALMART STORES, INC.
702 S.W. Eight St., Bentonville, AR 72716 USA
Tel: (479) 273-4000